Question : 11.5   Growth Policies 1) The term “brain drain” refers to A) highly : 1388430

11.5   Growth Policies

1) The term “brain drain” refers to

A) highly educated individuals who leave developing countries for high-income countries.

B) the diminishing returns to studying for an exam.

C) the negative impact on brain function of an individual’s overinvestment in human capital.

D) the decreased quality of the college-educated workforce.

2) Disease, poor nutrition, and substandard health care in developing nations can reduce growth in an economy by

A) reducing physical capital.

B) reducing human capital.

C) increasing labor productivity.

D) increasing technological change.

3) Enforcing property rights in an economy will

A) cause the market system to work less efficiently.

B) decrease the level of foreign portfolio investment.

C) encourage corruption and expand the underground economy.

D) raise the level of investment.

4) All of the following policies are ways for a country to promote long-run economic growth except

A) increasing vaccinations against infectious diseases.

B) undergoing political reform to decrease corruption.

C) enacting stronger laws to protect property rights.

D) imposing stricter regulations to limit foreign direct investment.

5) Robert Lucas, a Nobel laureate in economics, argues that there are ________ returns to human capital.

A) increasing

B) decreasing

C) constant

D) negative

6) You are an economic advisor to the president.  You are asked to recommend a policy to promote long-term economic growth in the economy. Which of the following policies would you choose?

A) a reduction in sales taxes

B) an investment tax credit

C) a reduction in taxes on luxury yachts

D) all of the above

7) Which of the following policies would not help promote economic growth?

A) a law requiring that the funds in an individual retirement account be taxed

B) a law restricting elected officials from accepting expensive gifts and trips from private individuals

C) a law that funds prenatal care for all expectant mothers

D) a law that subsidizes research in nanotechnology

8) A policy that offers parents a tax reduction based on how much they are saving for their children’s college education should ________ the equilibrium level of loanable funds and ________ the rate of long-term growth.

A) decrease; increase

B) increase; decrease

C) decrease; decrease

D) increase; increase

9) In 1973, the Club of Rome published a book titled The Limits to Growth, which predicted that economic growth would likely end in high-income countries because of

A) declining populations.

B) rapid increases in government debt.

C) increases in outsourcing of the production of goods and services to low-income countries.

D) increasing pollution and the depletion of natural resources.

10) All of the following are reasons why China is unlikely to maintain high enough rates of productivity growth to catch-up with the standard of living in the United States except

A) the United States invests more in research and development. than does China.

B) much of China’s growth is likely due to the transition from a centrally-planned economy to a market economy.

C) because of the low birth rate in China, the labor force will soon decline.

D) the Chinese migration of rural workers to more productive urban jobs.